Overhauling Victoria’s planning system: The Planning Amendment (Better Decisions Made Faster) Bill 2025

The Bill introduces three new planning permit streams, each with its own public notification, referral and review rights, assessment timeframes and other procedures, which broadly correspond the likely impact and risk associated with a proposed development or land use.

The new permit streams are as follows:

• Type 1 - Small-scale, low impact proposals (single dwellings and minor subdivisions). No public notice and no referral requirements. Approvals are deemed to be granted if no decision is made in 10 business days.
• Type 2 – Low impact proposals which include elements that require assessment, but are permissible by State and local planning policies. Public notice and referrals are only required for specified Type 2 permit applications, to be determined by regulations in due course.
• Type 3 – Larger, higher risk proposals with greater potential impacts. A 60-day assessment timeframe applies. Public notice and referrals are required. This is the default stream for proposals, where the planning scheme does not assign the proposal as Type 1 or Type 2.

The Bill also introduces a range of associated procedural provisions aimed at streamlining the planning permit process. These relate to the powers and obligations of referral authorities, requests for information by responsible authorities and applicant responses, rights for responsible authorities to reject frivolous, vexatious or irrelevant objections and deemed permits and conditions in circumstances where decisions are not made within statutory timeframes.

Third-party review rights to VCAT against decisions to grant planning permits will be significantly scaled-back under the Bill.

Only persons who have received direct notice of a Type 3 permit application may apply to VCAT for a review against the grant of a permit on the planning merits. No third-party review rights will apply to Type 1 and 2 applications.  

This change is expected to significantly reduce the numbers of third-party planning merits reviews against planning decisions in Victoria, similar to changes already made in other State jurisdictions, such as in South Australia’s planning reforms which commenced in 2021. 

The Bill also creates 3 new streams for planning scheme amendments, with escalating public participation rights, which correspond to the scale and impact of the proposed planning scheme amendment.

The 3 streams and the associated consultation and procedural steps for each are set out below.

Low impact

• Targeted consultation (to landowners, occupiers, and relevant authorities and any relevant Traditional Owner group(s)).
• Minister may refer the matter to a panel, but decisions can be made ‘on the papers’ without a public panel hearing.
• Can be initiated by Councils without Ministerial approval.

Medium impact

• Public notice and exhibition is required.
• Minister may refer the matter to a panel and any person may make submissions, but approval decisions can be made ‘on the papers’, without a public panel hearing.

High impact

• Public notice and exhibition is required.
• Amendments must be referred to a planning panel.
• Any person may make submissions.
• Panels may provide recommendations on an amendment to the Minister without a public hearing, if no public objections are made.

The details as to what will constitute a ‘low’, ‘medium’ or ‘high’ impact planning scheme amendment have been left to the regulations, which have not yet been publicly released.  

As we reported earlier in 2025, a range of associated changes have been made to planning panel procedure, some of which have already been introduced via the Consumer and Planning Legislation Amendment (Housing Statement Reform) Act 2025 (Vic).

These reforms are designed to make planning panels processes more efficient and less costly, but will generally reduce public participation in the amendment process, due to the expected reduction in public hearings. 

The Bill makes a range of changes to the assessment and procedure for the planning compensation regime under Part 5 of the P&E Act.

These changes in part seek to codify recent decisions of the Victorian Supreme Court. In general, we expect these changes to narrow entitlements to compensation but should clarify the procedure for making and negotiating claims which have been subject to significant judicial attention in recent years.

The statutory test for compensation in section 98 of the P&E Act is set to change from ‘financial loss’ to ‘actual financial loss’, with claimants now expressly bearing the burden of proof of any ‘actual financial loss’ caused by the relevant reservation (etc). The ‘natural, direct and reasonable’ causation test is not proposed to change.

Claims for compensation will need to be submitted within 2 years after the entitlement to compensation arises (usually a loss on sale or a planning permit refusal) and a range of other procedural provisions and clarifications have been made to the compensation ‘offer and response’ process.

Claims for legal and professional expenses are proposed to exclude expenses incurred before the right to compensation arose. This is intended to avoid ambit claims involving purely hypothetical permit applications. However, it may have the effect of disentitling claimants to reasonable legal expenses of obtaining advice on preparing a permit application that triggers a claim or advice on the implications of that claim, which is presumably not the intention. 

The Bill proposes substantial changes to the regulation of restrictive covenants by Victoria’s planning system. 

First, it is proposed to allow the issue of planning permits which breach a restrictive covenant. A former grandfathering provision which had the effect of making it simpler to modify or remove restrictive covenants issued before 25 June 1991 is also to be removed.

Second, the matters that a responsible authority must consider when assessing a permit application for the removal or modification of a restrictive covenant have been modified. Although the need to consider the ‘material interests’ of beneficiaries (including through loss of amenity, change in character to the neighbourhood and ‘any other material detriment’) is retained, the requirement to consider ‘financial loss’ to a beneficiary is to be removed.

It is also proposed to introduce a set of additional mandatory considerations when assessing a permit application to remove or modify a restrictive covenant, namely:

• the impact of the restriction on the ability to deliver the objectives of planning in Victoria, any applicable State planning strategy, regional planning strategy or planning strategy for the area covered by the planning scheme, and the objectives or purposes of the planning scheme;
• whether a matter that is the subject of the restriction to be removed or varied is also regulated by the planning scheme;
• where the proposed use or development that accompanies a proposal to remove or modify a restrictive covenant, whether that use or development is acceptable having regard to various matters.

In general, the reforms seek to strike a balance of facilitating desired forms of development contemplated by planning schemes against preserving the property rights of beneficiaries of covenants in appropriate cases, whilst reducing the administrative burden on responsible authorities.  

Whilst it will still be necessary for some developers of land to obtain the removal of a restrictive covenant after obtaining a permit which would otherwise result in a breach of a restrictive covenant, we expect many permit applicants to include a proposal to remove or modify the covenant in their development proposal, and that the cost of proceeding in the Supreme Court may be avoided in many instances.

An important aspect of the Bill is the sweeping change to the compliance, enforcement and civil and criminal penalty provisions, under Part 6 of the P&E Act.

These reforms represent a substantial shift in the way in which planning and development offences are regulated in Victoria and the new offences, penalties and enforcement powers will extend to corporations and their directors and officers.

The key reforms, and the potential implications for offenders, including corporations and their directors and officers, are set out below.

Increased civil and criminal penalties

In general, penalties for breaches of the P&E Act will significantly increase. This includes:

• New separate increased penalties for breaches of the P&E Act by corporations of up to 6,000 penalty units (currently $1.22 million) and 1,200 penalty units (currently $244,000) for natural persons;
• The addition of terms of imprisonment of up to 10 years for certain offences by natural persons;
• Increased penalties for continuing offences (120 penalty units (currently $24,421) per day for natural persons and 600 penalty units (currently $122,106) per day for corporations); and
• Where the Court is satisfied that a provision has been breached (on the balance of probabilities), the Court may make a ‘contravention order’ and impose a civil penalty of up to 2,000 penalty units (currently $407,020) for natural persons and up to 10,000 penalty units (currently $2.04 million) for corporations.

New orders following breaches of P&E Act

The Bill proposes to provide the Courts with a range of new orders against persons found guilty of breaching the P&E Act. These new powers are wide-ranging and have potentially significant reputational and financial implications for offenders.

Some of these compliance powers have already been introduced in other State jurisdictions, but others are unique to Victoria. They represent a substantial increase in the powers given to the Courts, to supervise and manage those who persistently or systematically breach the P&E Act and are aimed at reducing the culture of planning law breaches as a ‘cost of doing business’.

The key new orders that may be made by the Courts for offences against the P&E Act are as follows:

• Adverse publicity orders – to require offenders to publicise their offence;
• Commercial benefit orders – offenders may be required to pay up to three times the value of the commercial benefit that the offender (or their associate) has obtained from the offence;
• Supervisory intervention orders - to require a ‘persistent or systematic’ offender, at the offender’s own cost and for a period of up to 1 year, to take certain steps to improve compliance (such as training or supervision of staff), or implement specific monitoring, compliance, managerial or operational practices, systems or procedures, or provide compliance reports.
• Industry exclusion orders – to prohibit a ‘persistent or systematic offender’, for a specified period, from:
  • providing, or being otherwise involved in, services relating to the commercial development of land as specified in the order; and
  • being a director, secretary or officer of a body corporate providing, or otherwise being involved in, services relating to the commercial development of land.

Supervisory intervention orders and industry exclusion orders can only be made by the Courts in relatively confined (and serious) circumstances set out in the Bill. Nonetheless, the ability to make these orders represents a very substantial increase in the Courts’ powers to regulate the property development industry (and individual developers) in Victoria.  

False or misleading information offences

A new offence regime is to be introduced for knowingly or recklessly providing false and misleading information, including producing a document they know to be misleading, to a person or body carrying out a function under the P&E Act, the associated regulations or a planning scheme. These new offences are linked to new disclosure obligations for political gifts and donations (see below).

The penalty for these new offences is up to 240 penalty units (currently $48,842) or 2 years’ imprisonment or both. Liability for these offences may also be extended to officers of a corporation.

Enhanced investigatory powers for authorised officers

Authorised officers will also be given enhanced powers to investigate offences under the P&E Act, bringing Victoria into line with other modern reforms to planning investigation regimes interstate.  These powers include to enter land, if necessary with an ‘person assisting’ (such as an expert) in certain circumstances, and it will be an offence to hinder or obstruct an authorised officer.

The Bill makes various changes to how Infrastructure Contributions Plans (ICPs) and the Growth Areas Infrastructure Contribution (GAIC) are imposed, collected and applied, in relation to the provision and funding of new public infrastructure.

The Bill allows funds collected under ICPs to be applied to infrastructure works outside the relevant ICP area. This includes where the infrastructure is deemed to be essential, or part of significant infrastructure that facilitates development within the ICP area.

If an ICP has no land component, the monetary component can fund the acquisition of land (other than public purpose land identified in the ICP itself) which is needed to deliver ICP works, services or facilities. The aim is to provide greater flexibility and certainty for the use of ICP funds in relevant ICP areas. 

The older Development Contributions Plan (DCP) system is not affected by these changes.

Similarly, the collection and application of funds collected via the GAIC will also be broadened, such that GAIC funds can be used for infrastructure which serves a growth area, even if that growth area is located outside the area in which the GAIC was levied and collected.

The reforms will also allow GAIC payments to be made in advance of their due date, which already occurs in practice. The advance payment is proposed to constitute a ‘GAIC event’.  If passed, many ‘no GAIC trigger’ provisions which are a common feature of many contractual arrangements affecting land may need to be reviewed.

The Bill updates the objects of the P&E Act to include express references to the response and adaptation to climate change, preservation of rights of Traditional Owners, and the efficient, timely, integrated and orderly provision of infrastructure.

A notable new object of the P&E Act is to ‘increase housing supply, diversity and affordability, and to facilitate the provision of social and affordable housing in Victoria’. 

There is no specific regime for the provision or increase of social and affordable housing in the Bill, but the intention may be to provide for this in future regulations or amendments to planning schemes. 

The Bill proposes that certain types of planning permit applications, or permit applications made within specified areas must give notice the relevant Registered Aboriginal Party (RAP) before making a permit application.

The RAP may comment on the permit application, including as to whether the RAP believes that a cultural heritage management plan (CHMP) is required for the proposal.

Although a failure of a RAP to respond to a notice will not be taken to mean that the RAP consents to the permit application, this provision still has the potential to impose an additional administrative burden on both RAPs and permit applicants, where the benefits of this provision for cultural heritage protection, which is already regulated by the Aboriginal Heritage Act 2006, seem unclear. 

Following recommendations made in the Operation Sandon report in July 2023, Part 6 of the Bill proposes a new disclosure framework, which requires permit applicants and submitters to disclose ‘reportable gifts or donations’ made to responsible authorities and their advisers (or their registered political parties).

Planning permits will need to be accompanied by a relevant disclosure statement ‘if relevant’, and disclosures of reportable gifts and donations are to be recorded in a new public register.

Non‑compliance with the reporting and interest disclosure requirements will be an offence and may result in grounds for amendment or cancellation of a permit, or procedural challenges to planning scheme amendments affected by such a non-compliance.

The Bill proposes to establish a hierarchy of State, regional planning and municipal planning strategies, to set out a formal strategic planning vision for land use and development in Victoria over a 30 year horizon.

Regional planning strategies must be consistent with, and give effect to, a State planning strategy. There will also be a requirement for the Minister to be satisfied that a proposed amendment is consistent with prescribed State and regional planning strategies before deciding whether to approve the amendment.

Municipal planning strategies will set out the relevant council’s overarching goals and directions for future land use and development in a municipal district and must be consistent with, and give effect to, any State and regional planning strategy.